The “New Normal” Demands New Thinking
Generating value should be the name of the game in 2021
Posted on 01-17-2021, Read Time: Min
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Throughout 2020, we heard a lot about the “new normal” as we faced a global pandemic, economic uncertainty, and social unrest. Yet as a business leader, it is important to keep things in perspective through proper strategic planning and nimble approaches to leading your organization. With proper planning and leadership, opportunity can come from the adversity of 2020.
The “Standard” Way of Planning
This time of year, many companies have just gone through a strategic planning period. The CEO typically owns the development of the strategy and shares it with their executive team. Then, each department head is instructed to create a list of their department’s budgeting priorities. The department heads create lists but there is usually little guidance that the list should be based on the new strategy. Once prioritized, budgets are set and projects can begin with scope, budgets, and timelines often dictated.
Companies begin this process by defining strategic objectives and we end up with a result that is measured by how quickly, how costly, and what fits into a bread box. Cost overruns, time overruns, and ineffective solutions are commonplace. We even have a name for failed completed projects that don’t succeed: shelfware. Somewhere along the line, project delivery became about completion. Unfortunately, there is often a vital component missing: demonstrating value.
Companies begin this process by defining strategic objectives and we end up with a result that is measured by how quickly, how costly, and what fits into a bread box. Cost overruns, time overruns, and ineffective solutions are commonplace. We even have a name for failed completed projects that don’t succeed: shelfware. Somewhere along the line, project delivery became about completion. Unfortunately, there is often a vital component missing: demonstrating value.
The Missing Link
Value is often the casualty of present-day strategic planning efforts. Showing how the plan provides value to the organization is the missing link. It is time to fix how we deliver strategic initiatives (i.e., project management)! Ask a project manager why they are implementing a new solution. Their answer is often tactical. They know it needs to be done—but how it integrates into the bigger picture is missing.
Until business leaders reexamine aligning strategic objectives with project delivery objectives, companies will continue to miss the mark. The basic tenet is forgotten. Getting something done doesn’t mean that it is done right. Improvements may be achieved but are they the right achievements?
As we move into 2021, organizations should be rethinking and reinventing ways of getting things done. Changes should begin right after the strategy is finalized.
Until business leaders reexamine aligning strategic objectives with project delivery objectives, companies will continue to miss the mark. The basic tenet is forgotten. Getting something done doesn’t mean that it is done right. Improvements may be achieved but are they the right achievements?
As we move into 2021, organizations should be rethinking and reinventing ways of getting things done. Changes should begin right after the strategy is finalized.
How to Get Started
Let’s take a look at how to transform this strategic execution process with a value-generating focus:
Strategy and Alignment
Strategy and Alignment
- Once a strategy is defined, communicate it out. Start with the executive team and work through the entire organization. The delivery of the strategic vision should be how your team is measured and how success is measured.
- During the budget process, the prioritization of potential initiatives should be focused on assessing which initiatives will bring the most value to drive out the strategy. The discussion should be centered on value generation and creating realistic goals and metrics. Are the proper questions being asked and answered?
- Does the proposed initiative support the strategic objectives?
- What should success look like if this initiative is undertaken?
- What would be a realistic goal if this was successfully undertaken? (metrics) (If revenue will be increased, is 3% or 10% the goal? What’s realistic?)
- Is the overall company budget being allocated across divisions that align with the strategy? (e.g., if hiring differently is a strategic objective, will the HR/Talent team be getting enough funding to make that happen?)
Note: If leaders are being asked to create success metrics and being held accountable to deliver, there may be resistance. Measuring results makes people nervous. If I fail, will I risk my job? Failure should be built into this process. Assumptions are made in strategies all the time. If you do A, you’ll get B. Yet if we are measuring and prove that A doesn’t in fact get you to B, that is the knowledge that helps a company grow and create more realistic strategic objectives.
Delivery
Once the list of strategic initiatives has been selected and the budget is finalized, revamping how projects are managed needs to change.
- Once a project is ready to kick off, the individual’s skill set that will manage a strategic initiative will change. This individual needs to understand the corporate strategy enough to know how their project fits into delivering on those strategic goals. This individual’s performance should be measured against their drive to value.
- Note: This is not your typical project manager that has been taught to manage time, budget, and scope. While that is still a reasonable tactical measure, this individual needs to drive this effort with an eye toward value. For many projects, a project manager’s skill set works fine yet, for strategic value-generating initiatives, a leader accountable to driving desired outcomes (value) becomes more critical.
- Performance reviews should be aligned back to delivering value for the organization. It translates to a need for a leader that remains accountable to the strategic objectives.
- This role needs to incorporate the process of ensuring adoption is deemed successful. The value can’t be reached if the end-users don’t use a new solution because of a lack of training or missed expectations. How well an initiative is adopted will help define the level of value achieved.
- “What cannot be measured, cannot be managed.” Success metrics are paramount to value generation. By using these metrics through the execution of the project, it becomes easier to course correct if assumptions prove false and drive the initiative to different results.
Standard project management just doesn’t work anymore. It really hasn’t worked for some time. Standish Group started measuring project success based on time, budget, and scope in 1994. The numbers of failed projects were abysmal then and hasn’t improved radically since. Add in missed opportunities, lack of value, shelfware, and the numbers become dramatically worse.
Here’s What Value Looks Like
A large Fortune 500 company acquired another large corporation. Prior to integrating the two companies, the Fortune 500 company took the time to define expected success and develop success metrics. Then they created a plan to find synergies for cost reductions in every department.
Early on, the team (while intermittently measuring those metrics) realized that they reached their goal prior to completing the plan. The executive team was given the option to (1) continue cutting to the bare bones by completing the plan or (2) to stop and optimize the team to gain a competitive advantage. They chose the latter.
The interesting difference between this example and a normal acquisition integration is that a typical project would have continued through to execute the entire plan (thus cutting the company to the bare bones) through the found synergies without the value checkpoint. The management team would not have been given the option. In a “normal” project, the numbers wouldn’t have been realized until the end. The act of focusing on value allowed this particular company to make better business decisions.
Early on, the team (while intermittently measuring those metrics) realized that they reached their goal prior to completing the plan. The executive team was given the option to (1) continue cutting to the bare bones by completing the plan or (2) to stop and optimize the team to gain a competitive advantage. They chose the latter.
The interesting difference between this example and a normal acquisition integration is that a typical project would have continued through to execute the entire plan (thus cutting the company to the bare bones) through the found synergies without the value checkpoint. The management team would not have been given the option. In a “normal” project, the numbers wouldn’t have been realized until the end. The act of focusing on value allowed this particular company to make better business decisions.
New Year, Think Value
So, as we move into a new year, it is time to stop taking for granted that standard project management brings about the best results. Generating value should be the name of the game in 2021.
Author Bio
| Laura Dribin is the Founder, President and CEO of Peritius Consulting. Visit https://peritius.com/ Connect Laura Dribin |
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